According to The Wealth Club (a retail investment firm) the UK’s top 100,000 taxpayers paid some 24% of all income and capital gains tax in 2021/22. Their average bill was in the region of £559,000. This is up 18% compared with the previous year. The top 100 earners paid an average £46m each. This is up by 14%. According to the Wealth Club income and capital gains tax on the top 100,000 has risen by 45% over the past 5 years.
Interestingly, this is supported by a recent report by PwC. They state that the UK’s largest listed firms saw their overall tax contribution increase to £89.8bn in the last financial year. This is the equivalent to 10% of total government receipts. Their analysis showed that the direct taxes borne by these companies rose by 9.9% to £29.bn. The main contributors to this increase included higher employment taxes and the energy profits levy. Despite this, capital investment from the top 100 firms remained above £25bn. The 100 Group, which employed 1.8m people, paid an average of just over £40,000 per annum to each employee.
The concentration of tax contributions from both top businesses and individuals makes the UK vulnerable to the departure of high-value taxpayers. This is the view of many senior executives.
The general consensus appears to be that Ministers should work towards creating a simpler and more competitive tax regime. This should be designed to prevent an exodus of big contributors. Simply increasing tax rates is not the solution. Increasing the turnover of UK businesses through incentivisation, which in itself will generate increased tax, is a much better way of growing our economy. Also persuading more UK-based pension schemes to invest in UK businesses rather than overseas ones, would be another positive move!
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